Formatic Property Management

Exciting News!

On September 1st, 2021, the team of Prime Management Group based out of Whittier, California joined Formatic, doubling our size and giving us a stronger presence in Orange and Los Angeles counties. Formatic now has four offices in southern California and one office in Mexico City, Mexico.

Danny Flores, former CEO of Prime, has joined Formatic as a Vice President. He will also be continuing as the CEO of Prime Capital Investments, a Real Estate Syndication company that pools investor funds together (including yours too, just ask us how!) to acquire apartment complexes across the USA. Formatic will be involved in the management of many future acquisitions in partnership with Prime Capital, furthering our ability to provide top-tier services and experiences to more housing partners and amazing residents.

Why the two-month delay in the announcement? Because our focus has been on what it always is: Ensuring our residents and housing partners have a smooth transition and effortless experience! With the integration complete, we are "Facebook Official"!

Our offerings now include long-term management, short-term (vacation and other) management, apartment syndication, traditional real estate sales, and real estate investor-focused services (acquisition, divestments, repositions, optimizations).

If you are interested in exploring having your property or portfolio professionally managed by industry-leaders, assistance in evaluating or acquiring potential new real estate investments, or investing in apartment syndications, reach out today and let's explore together your goals and how we can work together as partners to accomplish them!

Thank you to all of our amazing partners in our journey to build a better life for everyone, together.

If you began investing in real estate from 5-20 years ago, you may be familiar with the 1% rule. This "rule" basically says that a property where the MONTHLY rent is 1% or more of the PURCHASE PRICE is a good deal, and anything else is not. It's a "cash flow" heavy model, and during the recession of 2008 it became popular.

At Formatic, we have long coached our clients that this model oversimplifies the real estate market and ignores many crucial components that should have different weight in your decisions based on your goals and timelines.

The 1% rule does not take into account the vast difference sin property taxes by city and state, the fact that states like California have virtually no property tax increase from when you purchased it (which is why long term investors favor California!), money down, interest rates, and more.

When this is pointed out to some, we often hear "Oh, it's not really a rule! It's just a guideline!". We've been around enough to know that it is absolutely used as a shortcut and a set rule by many. We call these things "Investor Donuts". They are tasty and easy to wolf down, yet in the end they are not meeting your nutritional (investment) needs. We see many people pass on amazing deals that fit their profiles perfectly because some guru told them don't skip this rule. And those deals are becoming harder and harder to find.

Reinforcing this, Bigger Pockets recently published some great data, and arguing that in many cases, a 0.5% guidelines (not rule), works better. We agree.

And it is a general filter guideline. The point is that you need to determine your LOCAL market's rule by running real numbers. Know your local market! Combine local market data with your goals and timelines and adjust accordingly. Using a "simple" rule to make your investment decisions could lead you financial starvation.

Whether it's cap rates, Gross Rent Modifiers, the 1% rule, the 50% rule, or any other metric, make sure you are only using them to w**d out the extreme outliers, then do that MATH to determine the actual performance. At Formatic, we teach the importance of learning how to use a proper Cash-on-Cash (CoC) and Internal Rate of Return (IRR). This creates true apples to apples comparisons across any price point and asset class.

If you need help finding or evaluating a deal before getting locked in, reach out! We will help you know the true numbers and discuss your goals to see if it's the right fit!

https://www.biggerpockets.com/blog/1-percent-rule-dead?utm_source=Iterable&utm_medium=email&utm_campaign=Pro%20Only%20Newsletter%20%7C%2007/05/2021%20%5BTest%20-%20Letter%20Version%5D&utm_channel=28425&utm_content=Marketing

Is the 1% Rule Dead? Yep. Here's Why The 1% rule is simply a rule of thumb—and an outdated one at that. Here's why real estate investors should ignore this metric.

All of us at Formatic Property Management wish the best holiday season for all our customer, vendors and friends.

We hope you have peace and joy throughout the season and a great 2021.

Cordiality in a landlord-tenant relationship is key to a long-lasting and healthy relationship. Sending a small gift or even a card is advisable.

Talk to Formatic about how to send a card or gift to the tenant on your behalf.

December is here, marking not only the end of this difficult 2020, but also the start of the much-awaited holiday season.

This brings some changes in your and your tenant's usual routines.

This week we will publish 3 tips that we think are worth following for a pleasant and happy holiday season.